PM reacts to RGM court ruling – “We have no plan B at this time”POSTED: 11/28/13 12:24 PM
St. Maarten -In her first reaction since Tuesday’s decision of the Court in Instance for the government to occupy the new administration building on Pond Island within 12 months and also pay damages to developer RGM, the prime minister said that she would want nothing more than to move into the new facility. But this all hinges on the ability of the General Pension Fund, APS, to confirm its financing of the completion works for the building.
“We would want nothing more than that. I don’t think it bothers anyone more than myself and the government that matters concerning this building seem to be dragging on and on. We have seen for several years where sometimes the capital expenditure that is necessary for the building is taken up in the budget. We have even reached a point some years ago where the whole project was submitted to the CFT as required. CFT gave its approval; however, by the time that approval was given we didn’t have an approved balanced budget, which meant that loan could not be carried out,” Prime Minister Sarah Wescot-Williams said during Wednesday’s weekly Council of Ministers press briefing.
The government now has a tight deadline since the building construction in 2008, with the leader of government, who also holds responsibility for General Affairs, saying that the government “can and should” enter the building within the 12 month period.
In the meantime, she expects to receive a plan of action from APS in December regarding the occupation of the facility and is hopeful that it would not exceed two weeks. APS and the government signed a memorandum of understanding a few months ago in order to finalize the financing and occupation of the building.
“I hope that the conclusions by APS would be that it is feasible,” the prime minister said optimistically.
She admitted, though, that should the APS not find the project feasible, the government currently has no alternative.
“We have no plan B at this time; we have gone through so many scenarios for that building.”
Finding a solution for the financing and occupation of the building has not been easy, the prime minister said. Different institutions have indicated their interest in financing the building, but it would have been far more expensive and exceeded budgetary constraints.
“This is a more expensive venture than if we were to get it on the basis of the Kingdom law for financial supervision. If we can get it passed through that procedure it would be at a very low interest rate; however, we keep bouncing against the fact that in order for the loan in whatever form is approved, we need to have an approved budget in which the loan is taking up.”
The prime minister also reacted to criticism and concerns from several sections of the community about the pension fund being used as the financier of the building’s completion.
“APS like most other pension funds has as part of its mandate to invest the money that they are receiving mow to be paid out to pensioners later. But it must be done cautiously and should be done on the basis of an investment plan. They have to by law make part of their investment in the Country St. Maarten,” she indicated.
Apart from the 12 month deadline, the court also sentenced the government to pay damages to developer RGM for the devaluation the building suffered after more than five years of vacancy.
The court ruling concludes a lawsuit developer RGM initiated on October 4 of last year whereby it demanded that the government move into the building and start using it for the purpose for which it was built. RGM completed its work on the project on March 31, 2008, but the government has only recently made moves to get the building ready for occupation.
Since the last quarter of 2007, the government has paid $481,000 per quarter in boot-fees to the developer. To date (including the third quarter of 2013), the government has paid $11,544,000 for a building it never used. The remaining debt on the project is another $20 million, according to the court ruling.
Block D and the parking garage are additional projects along with the main building that still needs to be financed and executed.
“One of the important aspects of that building was to have a public service centre, so a lot depends on having that centralization in place and that is not so. It is not possible for us to move into the building in stages right now,” the prime minister added.
And the saga continues. There is still the pending court case between the government and RGM on who is responsible for the maintenance and insurance of the building.
“In the first instance the government was given the right by the court and then this matter ended up in appeal. We would have been tenants in the building and it was suggested that we buy out RGM, but where do we get the financing to complete this building?”
More than Naf40 million would be needed to buy out RGM and complete the new government administration building, the prime minister stated.